The unicorn Mobile Premier League was about to lay off 350 employees, or 50% of its workforce due to the new Goods and Service Tax (GST) Rule, by which the government retained a 28% Goods and Services Tax levy on online gaming revenue. The new GST rules will increase the company’s tax burden which leads to the decision to lay off.
Esports and skill gaming unicorn Mobile Premier League (MPL) is laying off 350 employees, which represents about 50 per cent of its Indian workforce. The GST Council last week held that a 28% GST will be levied on the full deposit value, rather than on Gross Gaming Revenue.
“As a business, we can prepare for a 50% or even 100% increase, but adjusting to a sudden increase of this magnitude means we need to make some very tough decisions,” said Sai Srinivas, founder and chief executive officer of MPL.
Read More :‘Place of Supply’ in Online Gaming shall be Clarified through Notification says Revenue Secretary
The Finance Minister assured that the new GST rates for online gaming will be implemented promptly based on the requests of states such as Uttar Pradesh, Maharashtra, and Karnataka. However, due to concerns expressed by states like Goa and Sikkim regarding Casinos, the GST council will review the implementation after six months.
The Council has decided that online gaming, casinos and horse racing will be taxed at 28 per cent at the entry point on the full face value of bets. The GST statute would be amended to clarify that these three supplies are not actionable claims, in contrast to lotteries and wagering.
Read More: 28% GST on Online Gaming on Full Face Value Amount: GST Council
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